NIGEL LAWSON attempted to pass off last week's £1000 million of spending cuts and 'privatisation' measures as simply a small adjustment that a Conservative government had lied to voters of bit of financial tidying up.
The City of London, which deals in money and not words, had a very different attitude. It is baying the government's moves 1O121 inadequate. Share prices fell sharply on Friuay the day after Lawson made his economic statement.
The election boom The background to the cuts is quite simple. government engineered major consumer the last year to help ensure The money supply increased by 15 per cent in the 12 months up to May. Spending in the shops increased by ó per cent in the same time. This consumer boom helped gain the votes lat Thatcher won in the South elsewhere.
The problem for Thatcher is that this surge of spending has nothing to do with the underlying state of the British economy. was consumer spending for simply by oil revenues.
No sunicant wercase production in the British CCULOULY took place at all and huge quantities of imports were sucked in — the import being financed initially by North Sea oil.
The result is that now the government deterioration the balance Datel which is far worse than in the It was too brazen for a Tory Chancellor to admit In money ing.
1981 was million of ГОП ting £1500 million was of the has out worse even most what the had of "a £6000 surplus on the in only iwo Without veals. £500 million month North Sea oil d already toassive balance payments dericit. This situation getting worse each month.
Manufacturing Industry What underlies this rapid deterioration of the balance of payments is the sharp decline of the competitive position of British manufacturing industry which has taken place the Thatcher governel.
In 1978, the last year before office, had surplus of million goods. Br three months ing rate £2700 DESA million British the rapid The ПОИ collapse in COll petivity British industry Thatcher CAJOrIS British Thatcher Canc Once. British manufacturing dustry was still selling 22 per cent goods abroad than were imported.
By the first quarter of 1983 Britain was actually exporting 6 per cent less manutactured goods inan words British manufacturing industries competivity as shown by the struggle in markets, roughly 28 per cent in the four years of the Thatcher government.
without comparison the most competivity British manufacturing industry in history.
Lawson's spending cuts are only just part oi the price that is now going to be extracted by the Tory government. In four years Thatcher 118% 1970 1971 1978 1979 1980 1983 (Ist quurter!
More empty wards on the way with Lawson's curs smashed the women standards many many 94070 First will come the spending cuts in the NHS, education and other fields with another round of reductions to come in the autumn.
Then will come reductions wages brakes are slammed on the worsening balance of payments. has already started with the inTals and the reduction in living standards it will cause.
The process has just Started Insea or lyig to talk the Tories out of i Len Murray TUC leadership proposes, a joint plan should be drawn up between the Labour Party to prevent the -present cuts going through and to resist the inevitable second round later this year.
no policy to fight Tories Such a plan must have as its firs principle sup port for all those in strug gle against the Tories, and a pledge that • nealt workers, rail workers and others who will be fighting against the cuts, will not be betrayed as • ley Were last year's battles.
*Fighting to defend our health - page 4.
----- pull-quotes -----
throughout an election campaign. So, according to Lawson, there were no real economic problems. Just
Percentage of manufactured goods exported compared with those imported